Market Report: Airtours loses on talk of renewed takeover plans

ACQUISITIVE Airtours, the package holidays group that last year failed to capture Owners Abroad, its leading rival, could be flexing its muscles for another big takeover assault.

Word in the stock market is that it is keen to buy SAS Leisure, a leading Scandinavian holidays group, from Swedish airline SAS.

Rumours that SAS Leisure is available have circulated in the travel industry for some time. Thomson, Britain's biggest operator, was thought to be near to clinching a takeover last year.

Airtours is believed to have scrutinised SAS Leisure, which has encountered difficult trading conditions, but is reluctant to pay the fancy price the Swedes are seeking. However, with other would-be buyers seemingly out of the equation, the Swedish airline may be tempted to accept the Airtours offer.

The feeling that a deal, which could prompt a big rights issue, is near lowered Airtours shares 13p to 479p.

The rest of the stock market continued its rally but registered some dismay that New York's dramatic revival petered out so abruptly.

Consequently, a gain of 29.2 points was reduced to 15.3 at 3,131.5 by the close. Turnover was the highest for some weeks with bed-and-breakfast tax deals accounting for part of the volume.

The House of Fraser department stores group made a relatively subdued debut. Talk of 200p proved wide of the mark. The high was 189p against the 180p offer price. The shares closed at 186.5p in busy trading with Seaq putting turnover at 23 million.

Allied-Lyons put on 7p to 551p as NatWest Securities warmed to its pounds 739m acquisition of the Pedro Domecq drinks group. Grand Metropolitan advanced 6p to 470p as stories of a break-up of its Inntrepreneur pubs chain gathered strength.

Hogg, the insurance broker, soared a further 23p to 205p (after 208p). It said it had received approaches 'from a number of parties'. Last week the insurance broking arm of the giant HSBC banking group emerged as a 6 per cent shareholder.

Associated British Foods duly confirmed it was in talks with Greggs to sell its Bakers Oven chain. ABF rose a further 6p to 583p with Greggs resolutely unchanged at 743p.

The latest supermarket price cuts caused a little anxiety. Tesco, with Smith New Court positive, fell 1p to 213.5p. Bernard Matthews gained 1.5p to 94.5p as it purchased 200,000 of its shares at 93p.

Vodafone, the cellular radio group, continued to benefit from its March subscriber figures, gaining 11p to 547p. SG Warburg added to the cheer by lifting its profit expectations for this year from pounds 405m to pounds 421m.

SmithKline Beecham closed 2p down at 380p. After the market closed, the powers controlling the constitution of the FT-SE 100 index decreed the drug group's units, little changed at 343p, could remain in the index.

Rothmans, up 4p at 392p, and Vendome, the luxury goods group hived off last year, will become eligible for inclusion at the end of the year. But on current calculations, only 30 per cent of Rothmans and 10 per cent of Vendome can be brought into the index. Vendome gained 12p to 454p.

Power shares blew a fuse on unrest among big industrial users about near-record wholesale prices. National Power fell 11p to 458p and PowerGen 13p to 519p.

Hanson encountered unexpected US selling, falling 4p to 265p; Redland, responding to hopes of lower German interest rates, gained 14p to 570p.

Tepnel Diagnostics slipped 5p to 175p following a placing of 1.1 million shares at 175p, raising pounds 2m. Wakebourne, the computer group that used to be called Maddox, rose 0.5p to 4p in busy trading. A restructuring and share consolidation is expected.

Pacer Systems, following a dollars 9.1m US navy contract for signalling equipment, jumped 9p to 81p. The group is said to be preparing to embark on a round of institutional visits.

Euro Disney dipped 10p to 363p on talk of poor Easter trading; Manchester United scored a 15p gain to 675p on its results.

The row among Eurotunnel's rights issue advisers left the shares 4p higher at 509p.

Singer & Friedlander, the merchant banker, edged ahead 1p to 93p. A presentation by the unquoted Peoples Phone Co drew attention to the Singer involvement. The bank has a 22.3 per cent interest and intends to equity-account. Its stake is thought to be worth more than pounds 20m. PPC, which reported encouraging trading from its 58 shops, is believed to be preparing to come to market.

Hunterprint rose 3p to 25p on talk of planned meetings with analysts, but lawnmower maker Ransomes wobbled ahead of expected restructuring proposals with the shares 1p lower at 21p.

A US group has built a 30 per cent interest in the convertible preference shares.

Stockbroker Dunbar Boyle & Kingsley reached 215p when it made its debut on the 535 matched bargains market. The shares were introduced at 200p. A private client broker, DBK specialises in shares on the Seats market and the 535 market it has joined. It invited its clients to take up shares six years ago and they provided 20 per cent of the seedcorn capital.

WSP, consulting engineers, edged ahead 1p to 45p as a joint venture company won a five-year pounds 5m contract to manage the building and architectural services department of Croydon Council. The group merged with rivals AB Consulting in November and stockbroker Williams de Broe expects profits to climb from pounds 262,000 to pounds 1m this year and reach pounds 2m next year.

The FT-SE 100 index finished with a 15.3 points gain at 3,131.5 and the FT-SE 250 index rose 15.1 to 3,778.1. Turnover was 944.2 million shares from 43,168 deals. The account ends on Friday with settlement on 18 April.

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